Federal Deficit

The debt obligations of the US Federal Government

History of the Federal Deficit


Since the conception of the United States, federal spending has been the key to growth and allowing our country to prosper. Our federal deficithas been shaped by differing economic and political agendas in the past.


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understanding the debt ceiling and spending projections


Each year, the federal government establishes the spending obligation and the funding schedule is approved by Congress. What happens when the obligations surpass the allotted budget?


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Expectations of the federal deficit moving forward

There has been an enormous amount of debt added to the federal deficit over the last 15 years, greatly exceeding any period prior. What should we expect moving forward with steadily increasing debt obligations?


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Frequently Asked Questions

Federal Deficit

What is the federal deficit?
The federal deficit is the total amount of unpaid debt that represents our country's obligations, both foreign and domestic. Currently, the federal deficit exceeds $30 trillion. Historically speaking, the greater the debt of a country the less spending power that country has.
What is the difference between the federal deficit and the debt ceiling?
The federal deficit is the total amount of unpaid debt that represents our country's obligations, both foreign and domestic. The debt ceiling is the amount of maximum spending that is allowed on a fiscal basis. Each year Congress allocates the amount of spending for the US and when that limit is reached the government can shut down, at least theoretically.
Can the federal deficit effect the stock market?
For the most part, the federal deficit will not affect the day to day activities of the stock market. However, if there is a mismanagement of funds that results in the debt ceiling being breached, volatility could follow. We have had to address the debt ceiling several times over the last decade and each time it affected the stock market on theoretical fears, which in turn helped prompt Congress to act sooner than later.
Who determines the federal deficit?
The federal deficit is determinedeach year by Congressional approval.

On a side note, only the Federal Reserve can print additional money without the authorization of congress (after the debt ceiling has been established).

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HISTORY OF THE FEDERAL DEFICIT

“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

Thomas Jefferson - 3rd US President

What is the debt limit and what happens when the government reaches it?

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